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Type II error of a one-sided proportion test

Question

Andy claims 20%20\% of people love a certain app; Aaron believes the true share is 15%15\%. Aaron polls 100100 random people and uses a one-sided large-sample z-test of H0:p=0.2H_0:p=0.2 against Ha:p=0.15H_a:p=0.15 at level 0.050.05 (critical value z=−1.645z=-1.645). What is the probability β\beta of a type II error under Aaron's alternative, to three decimals?

Short answer

0.6710.671. The test rejects when p^<0.2−1.645×0.04=0.1342\hat p<0.2-1.645\times0.04=0.1342. If p=0.15p=0.15, p^\hat p has standard deviation 0.15⋅0.85/100≈0.0357\sqrt{0.15\cdot0.85/100}\approx0.0357, so β=P(p^≥0.1342)=P(Z≥−0.443)≈0.671\beta=\mathbb{P}(\hat p\ge0.1342)=\mathbb{P}(Z\ge-0.443)\approx0.671.

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